PROJECT REPORT

On
RATIO ANALYSIS
At
AXIS BANK

Submitted to
Maharishi Dayanand University Rohtak,
For
Partial Fullfillment of the award of degree of

MASTERS OF BUSINESS ADMINISTRATION

(BATCH-2017-19)

Submitted to: Submitted by:

Controller of Examination Name - Kamal
MDU Rohtak Reg.No.- 17F250089
Under the Supervision of: Roll No.-
Ms.Meenu Dhembla

INSTITUTE OF MANAGEMENT & TECHNOLOGY

[Approved by AICTE, and affiliated to M.D.U, ROHTAK]
TIGAON ROAD, NEAR SAI DHAM, FARIDABAD – 121002
 DECLARATION

I Kamal, Registration No.17F250089, Roll no. ……….of MBA IV Semester of Institute of

Management & Technology, Faridabad hereby declare that the Project entitled, "RATIO

ANALYSIS" is an original work and the same has not been submitted to any other institute for

the award of any other degree. The interim report was presented to the Supervisor on

……………. and the pre-submission presentation was made on …………………. . The feasible

suggestions have been duly incorporated in consultation with the Supervisor.

Countersigned

Signature of the Supervisor Signature of the Candidate

Ms.Meenu Dhembla KAMAL

Forwarded by

Director/Principal of the Institute

 PREFACE

In any organization, the two important financial statements are the Balance Sheet and Profit &

Loss Account of the business. Balance Sheet is a statement of financial position of an enterprise

at a point of time. Profit & Loss account shows the net profit or net loss of a company for a

specified period. When these statements of the last few years of any organization are studied, and

analyzed, significant conclusions may be arrived regarding the changes in the financial position,

the important policies followed and trends in profit and loss etc. Analysis and interpretation of

financial statement has now become an important technique of credit appraisal.

The investors, financial experts, management executives all analyze these statements. Though

the basic technique of appraisal remains the same in all the cases but the approach and the

emphasis in the analysis vary. A financial expert interprets the financial statement to evaluate the

financial soundness and stability, the liquidity position and the profitability or the earning

capacity of borrowing concern. Analysis of financial statements is necessary because it helps in

depicting the financial position based on past and current records. Analysis of financial

statements helps in making the future decisions and strategies. Therefore, it is very necessary for

every organization whether it is a financial or manufacturing, to make financial statement and to

analyze it.
 ACKNOWLEDGEMENT

A project report has never been the sale product of the person whose name appears on the cover.

There are always some people whose guidance proves to be of immense help in giving its final

shape. So, it is my first duty to express my gratitude towards all of them.

Success in my endeavor calls for co-operation and the valuable guidance of seniors and

colleagues. First, of all I would like to convey my heart full gratitude to Mr. Nitin Kumar

(development officer) for giving me permission to work on a project in this organization. I am

also thankful to Ms. Meenu Dhembla who has provided me supervision and guidance during

my project work. I cherish to record my thanks to management of AXIS BANK.

Last but not the least; I am extremely thankful to god who is the ultimate guide providing me

with valuable insist, courage and determination at every doorstep, if I don’t mention here that

love, affection & co-operation which I received from my family members. They too helped me a

lot in completing this report.

(KAMAL)
 TABLE OF CONTENTS

Chapter No. Chapter Name Page No.

1. Introduction
Significance of study
Review of existing Literature
Conceptualization
Focus of the study
Objectives of the study
Limitations
Chapterization
2. Research Methodology
Universe and survey Population Profile
of the Organization/Company
Research design
Sample size and techniques
Analysis pattern
Data collection
Identified Independent and Dependent
Variables
3. Micro Analysis

4. Macro Analysis

5. Summary Of Observations
Findings
Recommendations
Conclusion
6. Bibliography

7. Appendices
Questionnaire
 CHAPTER-1

INTRODUCTION
INTRODUCTION TO RATIO ANALYSIS

A ‘ratio’ is defined as the indicated quotient of two mathematical expressions and as the

relationship between two or more things. In Financial analysis, a ratio is used as benchmark for

evaluating the financial position and performance of a firm. Ratios help to summarize large

quantities of financial data and to make qualitative judgment about the firm’s financial

performance.

Ratio analysis involves comparison for a useful interpretation of the financial statements. Single

ratio in itself does not indicate favorable or unfavorable condition. Absolute figures expressed in

financial statements by themselves are meaningfulness. These figures often do not convey much

meaning unless expressed in relation to other figures. Thus, it can be say that the relationship

between two figures, expressed in arithmetical terms is called a ratio.

SIGNIFICANCE OF THE STUDY

The purpose and importance of ratio analysis are to evaluate or analyze the financial

performance of the firm in terms of Risk, Profitability, Solvency, and Efficiency. It helps us to

compare the trends of two or more company over a period of time. It is very important to access

the performance of the firms by analyzing its liquidity, profitability, asset management, and

efficiency ratios. These ratios analysis are widely used for taking important decisions and future

forecasting.

This cause of lack free market competition either among public and private banks. Gradually the

force of competition from the banking sector is still remain. In addition some areas of concern in

the form of increasing non-performing assets, declining profitability and efficiency, which would

threatening the viability of commercial banks. Commercial banks are playing a vital role in

giving direction to economic development by catering the financial requirement of trade and

industry in the country. By encouraging saving among the people, commercial banks could

fastened the process of capital formation.

REVIEW OF LITERATURE

It can be related to the present research in any way. Here are the reviews of the previous

researches related with the present study:

Bollen (1999) conducted a study on Ratio Variables on which he found three different uses of

ratio variables in aggregate data analysis:

(1) As measures of theoretical concepts,

(2) As a means to control an extraneous factor, and

In the use of ratios as indices of concepts, a problem is arise if it is regressed on other indices

or variables that contain a common component.

CONCEPTUALIZATION

Absolute figures expressed in financial statements by themselves are meaningfulness. These

figures often do not convey much meaning unless expressed in relation to other figures. Thus, it

can be say that the relationship between two figures, expressed in arithmetical terms is called a

ratio.

FOCUS OF THE STUDY

 To know the liquidity position and solvency

 To study the profitability of axis bank

 To find financial performance and efficiency use of capital employed.

OBJECTIVES OF RATIO ANALYSIS

 It is helpful in analysis of financial statement.

 It helps in simplification of accounting data.

 Helpful in comparative studies.

 It helps in locating weak spots of the business.

 Helpful in forecasting.

 Estimate about trends in business

 To have effective control.

 To study about the financial soundness

LIMATIONS OF RATIO ANAYLSIS

 False accounting data gives false ratio

 Comparisons not possible of different firms adopt different

 Accounting policies.

 Ratio analysis becomes less effective due to price levelchange

 Ratios may be misleading in the absence of absolute data.

 Limited use of a single Ratio.

 Window-Dressing

 Lack of proper standards.

CHAPTERIZATION

Chapter-1 Introduction

Chapter-2 Research Methodology

Chapter-3 Micro Analysis

Chapter-4 Macro Analysis

Chapter-5 Summary Of Observations

Chapter-6 Bibliography

Chapter-7 Appendices

ADVANTAGES OR USES OF RATIO ANALYSIS

1. Helpful in analysis of financial statements.

2. Simplification of accounting data.

3. Helpful in comparative study.

4. Helpful in locating the weak spots of the business.

5. Helpful in forecasting

6. Estimate about the trend of the business

7. Fixation of ideal standards

8. Effective control

9. Study of financial soundness.

RATIO

A ratio is a simple arithmetical expression of the relationship of one number to another. It may

be defined as the indicated quotient of two mathematical expressions. ratio is one number

expressed in terms of another and can be worked out by dividing one number into the other.

TYPES OF RATIO

There are four types of ratio which is used for calculating the firm financial position:

1. LIQUIDITY RATIOS

Liquidity ratios measure the ability of the firm to meet its current obligations. It is necessary to

strike a proper balance between high liquidity and lack of liquidity. A high degree of liquidity

means that a firms fund will be unnecessarily tied up in current assets. Whereas lack of liquidity,

implies failure of a company to meet its obligations due to lack of sufficient liquidity.
Liquidity ratios are of two types

 Current ratio

 Quick ratio

 Current ratio

Current ratio is calculated by dividing current assets by current liabilities:

Current ratio= Current Assets

Current Liabilities

Quick Ratio

Quick ratio establishes a relationship between quick or liquid assets and current liabilities.

Quick Ratio = Current Assets – Inventory-prepaid expenses

Current Liabilities

2. ACTIVITY RATIOS

Activity Ratios are used to evaluate the efficiency with which the firm manages and utilizes its

assets. These ratios are also called turnover ratios as they indicate the speed with which the firm

manages and utilizes its assets.

Activity ratio are of four types

 Inventory Turnover ratio

 Debtors Turnover Ratio

 Current Assets and Net Working Capital Turnover Ratio

 Creditors turnover Ratio

 Inventory Turnover Ratio

Inventory Turnover = Sales

Average Inventory

 Debtors Turnover Ratio

 Debtors Turnover

 Collection Period

Debtors Turnover = Net credit sales

Average debtor

Collection Period = Debtors x no of days

Gross Sales
 Current Assets and net working capital turnover ratio

This ratio shows the efficiency with which the firm is utilizing its current assets.

Current Assets Turnover = Sales

Current Assets

Net working capital turnover ratio = Sales / Net Working Capital

Creditors turnover ratio

Creditors turnover = Net credit purchase

Average Creditors

3. PROFITABILITY RATIO

A company should earn profits to survive and grow over a long period of time. Profit is the

measurement of the efficiency of the business.

Generally there are two types of profitability ratios calculated:

 Profitability in relation to sales.

 Profitability in relation to investment.

Profitability ratio are of four types

 Gross profit ratio

 Net Profit Ratio

 Operating profit ratio

 Return on Equity (ROE)

 Gross profit ratio:

Gross Profit*100
Gross Profit Ratio = Net Sales

Net Sales = Sales – Sales Return

 Net Profit Ratio:

Net Profit*100

(a) Net Profit Ratio = Net Sales

 Operating profit ratio:

Operating Net Profit

Operating Profit Ratio = *100
Net Sales
Operating net profit = net profit + non operating expenses-non operating income

 Return on Equity (ROE):

Preference dividend

Return on Equity Shareholder’s Funds = *100

Equity Shareholder’s Fund

Equity Shareholder’s Funds = Equity Share Capital + All Reserves + P/L a/c balance -

fictitious assets - debit balance of the P/L a/c.

 Rate of return:

Profit before tax, interest and dividends

Return on investment = *100

Net Worth

Profit before interest, tax and dividend = Profit after interest but before tax + interest paid - interest

income

4.LEVERAGE RATIOS

Long term creditors like the debentures holders; financial institutions etc. are interested in the

firm’s long-term financial strength. These ratios are calculated to assess the ability of the firm to

meet its long-term liability as and when they become due.

Leverage ratio are of two types:

 Debt-Equity Ratio

 Proprietory Ratio
 Debt-Equity Ratio:

Debt Long Term Loans

Debt Equity Ratio = OR

Equity Shareholder’s Funds

Long-term Loans: - Debentures + Mortgage Loans + BMU Loan+ Loan from Financial

Institutions and Public Deposits.

Shareholders’ Funds: - Equity Share Capital + Preference Share Capital + Share Premium +

General Reserves + Capital Reserves + Credit Balance of Profit and Loss Accounts and

Accumulated Losses and Fictitious Assets are deducted.

 Proprietory Ratio:

Propriety ratio: EquityShareholder’s Funds/ Debt + Equity

 CHAPTER-2

RESEARCH METHODOLOGY
CORPORATE PROFILE

Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum of

financial services to customer segments covering Large and Mid-Corporates, MSME,

Agriculture and Retail Businesses..

With its 3,589 domestic branches (including extension counters) and 13,977 ATMs across the

country as on 31st December 2018, the network of Axis Bank spreads across 1,946 cities and

towns, enabling the Bank to reach out to a large cross-section of customers with an array of

products and services. The Bank also has ten overseas offices with branches at Singapore, Hong

Kong, Dubai (at the DIFC), Shanghai and Colombo; representative offices at Dubai, Abu Dhabi,

Dhaka and Sharjah and an overseas subsidiary at London, UK.

Axis Bank is one of the first new generation private sector banks to have begun operations in

1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India

(SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC),

General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New

India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India

Insurance Company Ltd. The share holding of Unit Trust of India was subsequently transferred

to SUUTI, an entity established in 2003.

With a balance sheet size of Rs. 6,91,330 crores as on 31st March 2018, Axis Bank has achieved

consistent growth and with a 5 year CAGR (2012-13 to 2017-18) of 16% in Total Assets, 13% in

Total Deposits, 17% in Total Advances.

PROFILE OF THE ORGANISATION

Axis Bank was incorporated in the year 1993 with the name UTI Bank Ltd. Axis Bank is one of

the first new generation private sector banks to have begun operations in 1994. The bank was

promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known

as Unit Trust of India), Life Insurance Corporation of India (LIC), General Insurance

Corporation of India (GIC), National Insurance Company Ltd., The New India Assurance

Company Ltd.

On 9 March 2018, Axis Bank announced the launch of the worlds first Forex prepaid card issued

in conjunction with Diners Club International, a business unit of Discover Financial Services.

On 11 July 2019, Axis Bank announced its collaboration with Inter-American Investment

Corporation (IIC) to facilitate trade with Latin America and the Caribbean.

Axis Bank on 27 July 2019announced that it has entered into an agreement with Jasper Infotech

Private Limited to acquire 100% stake in its subsidiaries viz. FreeCharge Payment Technologies

Private Limited and Accelyst Solutions Private Limited, which together constitute the digital

payments business under the FreeCharge brand. The deal marked the first such acquisition of a

digital payments company by a bank in India.

SWOT ANALYSIS OF AXIS BANK

STRENGTHS

 Axis bank has been given the rating as one of top three positions in terms of fastest

growth in private sector banks.

 Financial express has given number two position and BT-KPMG has rated AXIS bank as

the best bank with some 26 parameters

 The bank has a network of 1,493 domestic branches and 8,324 ATMs.

 The bank has its presence in 971 cities and towns.

 The banks financial positions grows at a rate of 20% every year which is a major positive

sign for any bank.

WEAKNESSES

 Gaps – Majorly they concentrated in corporate, wholesale banking, treasury services,

retail banking

 Foreign branches constitute only 8% of total assets

 Very recently the bank started focusing its attention towards personal banking and rural

areas

 The share rates of AXIS bank is constantly fluctuating in higher margins which makes

investors in an uncomfortable position most of the time

 There are lot of financial product gaps in terms of performance as well as reaching out to

the customer

 There are many fraudulent activities involved in credit cards as the banks process credit

card approval even without verification of original documents

OPPORTUNITIES

 Acquisitions to fill gap

 In 2017, acquired Enam Securities Pvt Ltd – broking and investment banking

 Now number of branches increased to 1493 from 339.

 Last quarter there were 48 new branches opened across the Nation

 There are lot of opportunities to have the advance technicalities in banking solutions

compared to existing major players

 The concept of ETM (Everywhere teller machine) by AXIS Bank had a good response in

terms of attracting new customers in personal banking segment

THREATS

 Since 2017, RBI has increased CRR by 100 basis points

 RBI allowed foreign banks to invest up to 74% in Indian banking

 Government schemes are most often serviced only by govern banks like SBI ,Indian

Banks, Punjab National Bank etc

 ICICI and HDFC are imposing strong threats in terms of their expansion in customer base

by their aggressive marketing strategi

VISION OF THE BANK

To be the preferred financial solutions provider excelling in customer delivery through insight,

empowered employees and smart use of technology.

Core Values:

 Customer Centricity

 Ethics

 Transparency

 Teamwork

 Ownership

KEY MILESTONES

 Axis Bank wins the Best Loyalty Program in Financial Sector - Banking at the Customer

Loyalty Awards 2019. Axis Bank wins the Best Rewards Program for the 4th consecutive

year at the Customer Loyalty Awards 2019..

 Axis wins the Champion of Champions – Loyalty Program of the Year at the Customer

Loyalty Awards 2019.

 Axis Bank wins the Best Contact Centre at the Customer Experience Awards 2019.

 Axis Bank wins Best Use of Analytics for Business Outcome at the IBA Banking

Technology Awards 2019.

SERVICES :

 RETAIL BANKING

In the retail category, the bank offers services such as lending to individuals/small

businesses subject to the orientation, product and granularity criterion, along with

liability products, card services, Internet banking, automated teller machines (ATM)

services, depository, financial advisory services, and Non-resident Indian (NRI) services.

Axis bank is a participant in RBI's NEFT enabled participating banks list.

  CORPORATE BANKING CREDIT

Bank offers various loan and fee-based products and services to Large and Mid-corporate

customers and Small and Medium Enterprise (SME) businesses. These products and

services include cash credit facilities, demand and short-term loans, project finance,

export credit, factoring, channel financing, structured products, discounting of bills,

documentary credits, guarantees, foreign exchange and derivative products. Liability

products including current accounts, certificates and deposits and time deposits are also

offered to large and mid-corporate segments.

TRANSACTION BANKING

In April 2018, TxB provides integrated products and services to customers in areas of

current accounts, cash management services, capital market services, trade, foreign

exchange and derivatives, cross-border trade and correspondent banking services and tax

collections on behalf of the Government and various State Governments in India.

 TREASURY

Treasury manages the funding position of the Bank and also manages and maintains its

regulatory reserve requirements. It invests in sovereign and corporate debt instruments

and engages in proprietary trading in equity and fixed income securities, foreign

exchange, currency futures and options. It also invests in commercial papers, mutual

funds and floating rate instruments as part of the management of short-term surplus

liquidity. In addition, it also offers a wide range of treasury products and services to

corporate customers.
  SYNDICATION

Bank also provides services of placement and syndication in the form of local currency

bonds, rupee and foreign term loans and external commercial borrowings.

 INVESTMENT BANKING AND TRUSTEE SERVICES

Bank provides investment banking and trusteeship services through its owned

subsidiaries. Axis Capital Limited provides investment banking services relating to

equity capital markets, institutional stock broking besides M&A advisory. Axis Trustee

Services Limited is engaged in trusteeship activities, acting as debenture trustee and as

trustee to various securitization trusts.

 INTERNATIONAL BANKING

The Bank continues to offer corporate banking, trade finance, treasury and risk

management solutions through the branches at Singapore, Hong Kong, DIFC, Shanghai

and Colombo, and also retail liability products from its branches at Hong Kong and

Colombo. The representative office at Dhaka was inaugurated during the current financial

year.Through the Representative Office at Dhaka.

RESEARCH METHDOLOGY
The methodology used in project is Descriptive research. Descriptive research includes surveys

and fact-finding enquires of different kind. This type of research is done in order to describe the

present situation, trends. The main purpose of this research is to describe the state of affairs as it

existing at present.
Descriptive research studies has no control over the variables, that is ex post facto research, the

main character of this research is that the researcher has no control over the variables, he can

only report what has happened or what is happening. For survey methods primary data from the

investors and Personal Interview from various respondents.

In this type of research the variables were not under the control of researcher for variables such

has inflation, price fluctuations, demand, supply, interest rates, money supply, etc. The

researcher can only explain what has happened and is happening and also he cannot predict

future happenings by applying some treatment to such variables.

RESEARCH DESIGN

A research design is the arrangement of condition for collection and analysis of the data in the

manner that aims to combine relevance to the research purpose with the economy in procedure.

In fact the research design is the conceptual structure with in which research is conducted, it

constitutes the blueprint for the collection, measurement and analysis of data.

SAMPLING

Sampling is sequential steps to identify a group of population to who questions, interview have

to be taken. It refers to techniques or procedure the researcher would adopt in selecting items for

the sample.

Samples are respondents from whom data are to be collected for interpretation and to come to

conclusion.
SAMPLE SIZE

This refers to the number of items to be selected from the universe to constitute a sample. The

size of sample should not be excessively too large or too small, so it must be optimum, so a

normal sample size of 97 is selected for research.

An optimum sample is one, which fulfills the requirements of efficiency, representativeness,

reliability and flexibility.

SAMPLING TECHNIQUES

When sampling, you need to decide what units (i.e., what people, organisations, data, etc.) to

include in your sample and which ones to exclude.

As you'll know by now, sampling techniques act as a guide to help you select these units, and

you will have chosen a specific probability or non-probability sampling technique:

A.) PROBABILITY SAMPLING

Probability sampling is that every item of the universe has an equal chance of inclusion in

thesample, so it is like a lottery method in which individual units are picked up from the whole

group of population. Probability sampling is also called as ‘random sampling’ or‘ chance

sampling’. The result obtained from probability or random sampling can be assured in terms of

probability. Random sampling ensures the law of Statistical Regularity, which states that if on an

average the sample chosen is a random one, the sample will have the same composition and

characteristic as the universe. This is the reason why random sampling is considered as the best

technique of selecting a representative sample.

In brief, the implication

It gives each possible sample combination an equal probability of being chosen.

Keeping this in view we can define a simple random sample from a

finite population as a sample, which is chosen in such a way that each of possible

samples have the same probability of being selected.

B.) NON - PROBABILITY SAMPLING

Non - Probability sampling is that sampling procedure which does not afford any basis for

estimating the probability that each item in the population has of being included in the Sample. It

is also called Deliberate Sampling, Purposive Sampling and Judgment Sampling. For example if

the economic conditions of people living in a state are to be studied, a few towns and villages

may be purposively selected for intensive study on the entire state. So in order to identify the

preferences of investor I have choosed Non – Probability sampling method.

ANALYSIS PATTERN

For analysis, the collected data non-statistical tools like pie charts and graphs are used in this

study.

DATA COLLECTION

Data is unprocessed information of a particular state of affairs. Data becomes very important for

any decision making process. When a researcher decides upon the method of data collection, he

must be very clear with Primary and Secondary Data.

The primary data are those that are collected a fresh and for the first time and thus happen to be

original in character. Secondary Data are those which have been collected by someone else and

which have already been passed through the Statistical process.

The method of Data Collection may vary with the two types of data, since primary data are to be

originally collected from the source whereas secondary data collection work is merely a

compilation.

In this project primary and secondary data are required at various situations, so therefore I have

decided to collect primary data through Questionnaire and secondary data through various

sources like newspaper, magazines, journals, reports, reports prepared by research scholars,

historical documents, companies records, website, publishing, financial statements, budgets, etc.

Sources of information fall under two categories :-

Internal sources and External sources

INTERNAL SOURCES

Every company has to keep certain records such as accounts, reports, etc. these records provide

sample information which an organization usually keeps collection in its working.

EXTERNAL SOURCES

When internal records a re insufficient and required information is not available, the organization

will have to depend on external sources of data.

These are:

A.) Primary Data

B.) Secondary Data

(A). PRIMARY DATA :

The data collected for a purpose in original and for the first time is known as primary data.The

researcher collect this data to study a particular problem.

Here the primary data is data collected through questionnaire fromthe personal interaction with

people/clients from the various places in Faridabad.

(B). SECONDARY DATA :

The data which is collected from the published sources i.e., not originally

collected of the first time is called Secondary Data. The brochure and material

provided by AXIS Bank. The data collected from the magazines of the NSE,

Economic Times, etc. Various books relating to the investments, capital market

and other related topics.

Identified Independent And Dependent Variables

First, we describe the meaning of dependent and independent variables:

Dependent Variable: the variable used to describe or measure the problem

under study.

Independent Variable: the variable under study that influence the problem

(dependent variable) is called independent variable.

 CHAPTER - 3

MICRO ANALYSIS
1. Current ratio
The current ratio is the ratio of the current assets and current liabilities. It is calculated by

dividing current assets by current liabilities.

Current Ratio = Current assets

Current liabilities

Table 1

Current ratio

YEAR CURRENT CURRENT RATIO

ASSETS(cr) LIABILITY(cr)
2015-2016 867.98 4587.57 0.189203
2016-2017 1056.29 5065.73 0.208517
2017-2018 1247.58 7206.25 0.173125
2018-2019 1320.37 7990.89 0.165234

9000

8000

7000

6000

5000
CURRENT ASSETS(cr)
4000
CURRENT LIABILITY(cr)
3000

2000

1000

0
2015-2016 2016-2017 2017-2018 2018-2019

Graph 1
2. QUICK RATIO
It is a measure of liquidity calculated dividing current assets minus inventory And prepaid
expenses by current liabilities

The ratio is calculated as follows: Quick Assets / Quick Liabilities

Table 2

QUICK RATIO
YEAR QUICK ASSETS CURRENT RATIO
(cr) LIABILITY(cr)
2015-2016 815.43 7206.25 0.113156
2016-2017 1021.26 5065.73 0.201602
2017-2018 815.43 7206.25 0.113156
2018-2019 1320.37 7990.89 0.165234
9000
8000
7000
6000
5000
QUICK ASSETS
4000
CURRENT LIABILITY(cr)
3000
2000
1000
0
2015- 2016- 2017- 2018-
2016 2017 2018 2019

Graph - 2
3. DEBTORS TURNOVER RATIO

Debtors constitute an important constituent of current assets and therefore the quality of debtors

to great extent determines that firm’s liquidity.

Debtors turnover = Cr .Sales

Debtors

Table 3

DEBTORS TURNOVER RATIO

YEAR AVERAGE NET AVERAGE RATIO
CREDIT SALE(cr) DEBTORS(cr)
2015-2016 62.25 401.02 0.155229
2016-2017 169.86 454.83 0.373458
2017-2018 202.33 438.59 0.461319
2018-2019 29.36 446.83 0.065707

500
450
400
350
300 AVERAGE NET CREDIT
250 SALE(cr)
200 AVERAGE DEBTORS(cr)

150
100
50
0
2015-2016 2016-2017 2017-2018 2018-2019

Graph - 3
4. DEBT EQUITY RATIO
It measures the relation between debt and equity in the capital structure of the firm. In other

words, this ratio shows the relationship between the borrowed capital and owner’s capital.

It is expressed as: Long term debt / Shareholders Funds.

Table 4

DEBT EQUITY RATIO

YEAR DEBT NET WORTH RATIO
2015-2016 1424.08 781.19 1.82
2016-2017 1981.63 792.42 2.5
2017-2018 1340.40 811.72 1.66
2018-2019 779.67 829.70 1.1

2500

2000

1500
DEBT
1000 NET WORTH

500

0
2015-2016 2016-2017 2017-2018 2018-2019

Graph – 4
5. INTEREST COVERAGE RATIO
This is a measure of the protection available to creditors for payment of interest charges by the

company. The ratio shows whether the company has sufficient income to cover its interest

requirements by a wide margin.

ICR = Profit before Interest and Tax (EBIT)

Interest

Table 5

INTEREST COVERAGE RATIO

YEAR EBIT INTEREST RATIO
2015-2016 498.56 468.19 1.06
2016-2017 520.1 504.63 1.03
2017-2018 554.55 517.57 1.07
2018-2019 415.83 392.70 1.05
600

500

400

300 EBIT
INTEREST
200

100

0
2015-2016 2016-2017 2017-2018 2018-2019

Graph – 5
6. PROPRIETARY RATIO
It establishes relationship between the propitiator or shareholders funds & total tangible assets.

The ratio indicates properties stake in total assets.

It may be expressed as:

Proprietary Ratio= Shareholder’s

Total Assets

Table 6

PROPERTIORY RATIO
YEAR SHAREHOLDER TOTAL ASSET RATIO
FUND
2015-2016 781.19 7363.18 0.12
2016-2017 792.42 8463.02 0.09
2017-2018 811.72 10040.33 0.08
2018-2019 829.21 10346.49 0.08

12000

10000

8000

6000 SHAREHOLDER FUND

TOTAL ASSET
4000

2000

0
2015-2016 2016-2017 2017-2018 2018-2019

Graph - 6
7. CREDITORS TURNOVER RATIO

Creditors constitute an important constituent of current liabilities and therefore the quality of

creditors to great extent determines that firm’s liquidity.

Creditors turnover = Net credit purchase

Average Creditors

Table 7
YEAR 2016-2017 2017-2018 2018-2019

C.T.R 0.37 0.52 0.46

C.T.R

0.6

0.5

0.4

0.3 C.T.R

0.2

0.1

0
2016-2017 2017-2018 2018-2019

Graph - 7
8. OPERATING PROFIT RATIO:

Inbusiness, operating margin, operating income margin, operating profit margin or return on

sales (ROS) is the ratio of operating income divided by net sales, usually presented in percent.

Operating Net Profit

Operating Profit Ratio = *100

Net Sales

Operating net profit = net profit+ non operating expenses-non operating income

Table 8
YEAR 2016-2017 2017-2018 2018-2019

OPR 3.51 0.007 1.57

OPR

4
3.5
3
2.5
2 OPR
1.5
1
0.5
0
2016-2017 2017-2018 2018-2019

Graph - 8
9. RETURN ON EQUITY (ROE)

Equity shareholders of a company are more interested in knowing the earning capacity of their

funds in the business.

Net profit after interest, tax and

Preference dividend
Return on Equity Shareholder’s Funds = *100
Equity Shareholder’s Fund

Equity Shareholder’s Funds = Equity Share Capital + All Reserves + P/L a/c balance - fictitious

assets - debit balance of the P/L a/c

Table 9

YEAR 2016-2017 2017-2018 2018-2019

ROESFR 1.87 -0.58 0.99

ROESFR

1.5

1
ROESFR
0.5

0
2016-2017 2017-2018 2018-2019
-0.5

-1

Graph - 9
10. RATE OF RETURN

In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or

sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an

investment relative to the amount of money invested.

Profit before tax, interest and dividends

Return on investment = *100
Net Worth

Profit before interest, tax and dividend = Profit after interest but before tax + interest

paid -interest income

Table 10

YEAR 2016-2017 2017-2018 2018-2019

ROR 11.72 4.61 6.82

ROR

12

10

6 ROR

0
2016-2017 2017-2018 2018-2019

Graph - 10
 CHAPTER-4

MACRO ANALYSIS
 INTERPRETATION

1. Current Ratio

The above table shows that AXIS BANKdoes not have the sufficient current assets to meet the

current liabilities .The ratio increased from 0.19 to 0.21 from 2015-2016 to 2016-2017. Then it

has been decreasing slowly year by year.

The standard current ratio is 2:1 but the company’s current ratio is not satisfactory because in the

last 4 years the highest current ratio is 0.21 that is in the year 2015-2016& the lowest one is 0.17

that is in the year 2017-2018 and 2018-2019.

2. Quick Ratio

The above table shows that the ratio increased from 2014-2015to 2015-2016 i.e., 0.18 to 0.21

and then got decreased from 2016-2017 to 2017-2018 i.e., 0.21 to 0.11 and then increased from

2017-2018 to 2018-2019 i.e., 0.11 to 0.15 .

The standard quick ratio is 1:1 but the quick ratio for the AXIS BANK is not satisfactory

because for all years it is below the standard ratio.

3. Debtors Turnover Ratio

In the initial year it was 0.16 (2015-2016) then it is increased to 0.37 (2016-2017) and then

increased to 0.42 (2017-2018) and then it is decreased to 0.17 (2018-2019).

The debtor’s turnover ratio is satisfactory for all years because it was less than standard 30 days.
4. Debt Equity Ratio

The debt equity ratio is in the year 2015-2016 i.e. 1.82then it is gets increased in the next year

i.e. in 2016-2017 (2.5) and then it is decreasing year by year 1.66 and then it came to 1.1 .

The debt equity ratio is not satisfactory because out of four years only in one year i.e., during the

year 2018 to 2019 it has the more share of owners than the debt so this ratio is not satisfactory.

On the other side long term debt is increased in these year.

5. Interest Coverage Ratio

In initial year it was 1.06 then it decreased to 1.03 in 2016-2017 then it increased in the next year

by 1.07. Then it decreased to 1.05 in the last year.

The interest coverage ratio is satisfactory because there is sufficient amount available to pay out

from operating profit to make payment of interest so this ratio is satisfactory.

6. Proprietary Ratio

The proprietary ratio was 0.12 in the initial year and then it decreased year by year i.e., 0.09,

0.08, & 0.08.

The proprietary ratio is not satisfactory because owners’ contribution is less than the outsiders in

the total assets.

7. Creditors Turnover Ratio

AXIS BANK autos credit turnover ratio is in increase in 2017-2018 as compared to previous

year which is good for the company .

In this year the time period of payment is greater but the ratio is going to decrease in 2018-2019

as compared to previous year.

8. Operating Profit Ratio

Operating profit ratio was 3.51 in the initial year and then it is year by year i.e., 3.51, 0.007, 1.57.

Operating profit ratio was 3.51 in the initial year.

9. Return on Equity

This ratio measures how efficiently the equity shareholder’s funds are being used in the business.

It is true measure of the efficiency of the management.

It shows what the earning capacity of the equity shareholders funds. The higher the ratio, the

better it is, because in such a case equity shareholders may be given a higher dividend.

10. Rate of Return

This ratio helps in taking decisions regarding capital investment in the new projects.

The new projects will be commenced only if the rate of return on capital employed/ net worth in

such projects is expected to be more than the rate of borrowings

 CHAPTER-5

SUMMARY OF OBSERVATIONS
RECOMMENDATIONS

Market share:The Company’s main motive should be to increase their market share. Many

investors before investing see the market share in the market. So if the company wants to

increase the value they have to increase the market share. This can be achieved by creating a

competitive edge over its competitors. The company has to increase its sales by various means

like maintaining good relationships with the customers, allowing good credit facility and also by

reducing cost so as to provide a competitive price in the market. Proper marketing strategies can

also help the company in having good sales.

Investments: The Company has invested in various fields which are good as it has diverse its risk

but there is some loop holes in the investment too. The company should also invest in there is

free return also. The company didn’t invest in either of the risk free return. The company should

invest in the government securities and debentures so that the company should be risk free up to

some percentage.

Payment policies: Payment policies followed by Axis bank should be reviewed time to time and

steps should be taken for prompt payments so that the good vendor database can be maintained.

Collection period: Axis bank have a low debtor turnover ratio and a very high collection period

of 90days which implies excessive blockage of funds as debt which might result in stagnation of

the business. Attempts to reduce down the debtor’s turnover ratio to 30 days should be made

which would ensure better availability of funds for business operations.

Proper training: The personnel must be given training for proper use of equipments and materials

so as to avoid damages which will result in saving the repair and maintenance cost.
SUGGESTIONS

 From the study it is found that there is lack of periodic review and analysis which is leading

to inefficient utilization of resources.

 Liquidity refers to the ability of concern nto meet its current obligation as and when these

become due. The bank should improve its liquidity position.

 The bank profits are huge in the current year, it is better to declare the dividend to

shareholders.

 The bank is utilizing the fixed asstes, which majorly help to the growth of the organisation.

The bank should maintain that perfectly.

 The bank fixed deposits are raised from the inception, it gives the other income i.e., interest

on fixed deposits.

 Bank needs to have stringent credit policy, to reduce the funds required for working capital.

 The bank must do efficient utilization of shareholders fund to improve its ROI and ROE to

maintain its goodwill in investors mind.

CONCLUSION

The purpose of our project report at organisation is to help us attain knowledge about the

working pattern in on organisation.

Applying theoretical knowledge into practice helps in gaining additional knowledge. We learn

the skill of planning, organising and completing the assignment within the stipulated time.

Ratio analysis of financial statement shows that bank’s current ratio is better than the quick ratio

and fixed/worth ratio. It means bank has invested more in current assets than the fixed assets and

liquid assets. The cash flow statement shows that net increase in cash generated from operating

and financing activities is much more than the previous year but cash generated from investing

activities is negative in both years. Therefore analysis of cash flow statement shows that cash

inflow is more than the cash outflow in AXIS Bank. Thus, the ratio analysis and trend analysis

and analysis of cash flow statement shows that AXIS Bank’s financial position is good.
BIBLIOGRAPHY
REFERENCES

 AXIS BANK REGS share price (AXB)". London Stock Exchange. Retrieved 1 October

2018.

 "Axis Bank Financial Results". EarningsIndia. Retrieved 27 July 2018.

 Axis Bank Annual Report PDF 2017-18

 "DISCLOSURE ON REMUNERATION" (PDF). Axisbank.com. Retrieved 1 October

2018.

 Statement showing shareholding pattern of the Promoter and Promoter Group".

 Statement showing shareholding pattern of the Public shareholder". BSE.

Retrieved 8 October 2018.

D.K. GOEL,R.K. SINGLA , M.K.GUPTA Financial analysis tools and techniques

2018

Websites:

 http://www.axisbank.com/

Reports: Annual reports of AXIS Bank

APPENDICES
 BALANCE SHEET OF AXIS BANK
As on March 2014 to March,2019 (Rs. In crores)

2015 2016 2017 2018 2019

CAPITAL AND

LIABILITIES:

Total Share 1086.75 1239.83 1249.34 1462.68 1463.29

Capital

Equity Share 736.75 889.83 899.34 1112.68 1113.29

Capital

Share 0.02 0.00 0.00 0.00 0.00

Application

Money

Preference Share 350.00 350.00 350.00 350.00 350.00

Capital

Reserves 11813.20 21316.16 23413.92 45357.53 48419.73

Revaluation 0.00 0.00 0.00 0.00 0.00

Reserves

Net Worth 12899.97 22555.99 24663.26 46820.21 49883.02

Deposits 99818.78 165083.17 230510.19 244431.05 218347.82

Borrowings 33544.50 38521.91 51256.03 65648.43 67323.69

Total Debt 146263.25 226161.17 306429.48 356899.69 335554.53

Other Liabilities 21396.17 25227.88 38228.64 42895.39 43746.43

And Provisions
Total Liabilities 167659.42 251388.95 344658.12 399795.08 379300.96

ASSETS:

Cash And 6344.90 8934.37 18706.88 29377.53 17536.33

Balances With

RBI

Balances With 6585.07 8105.85 18414.45 8663.60 12430.23

Banks,Money At

Call

Advances 91405.15 146163.11 195865.60 225616.08 218310.85

Investments 50487.35 71547.39 91257.84 111454.34 103058.31

Gross Block 5525.65 5968.57 6298.56 7036.00 7443.71

Accumulated 1487.61 1987.85 2375.14 2927.11 3642.09

Depreciation

Net Fixed Assets 4038.04 3980.72 3923.42 4108.89 3801.62

Capital Work In 96.30 147.94 189.66 0.00 0.00

Progress

Other Assets 8702.59 12509.57 16300.26 20574.63 24163.62

Contingent 97507.79 119895.78 177054.18 371737.36 803991.92

liabilities

Bills for 9803.67 15025.21 22717.23 29377.55 36678.71

collection

Book 170.35 249.55 270.37 417.64 445.17

value(Rs.)

EPS 27.22 28.55 34.59 37.37 33.78

No. of 736716094 889823901 899266672 1112687495 1113250642

equity

shares
PROFIT AND LOSS ACCOUNT OF AXIS BANK
For The Year Ended March 2019 (Rs. In Crores)

2015 2016 2017 2018 2019

INCOME:

Interest Earned 9409.90 13784.49 22994.29 30788.34 31092.55

Other Income 3416.14 4983.14 5929.17 8810.77 7603.72

Total Income 12826.04 18767.63 28923.46 39599.11 38696.27

EXPENDITURE:

Interest Expended 6570.89 9597.45 16358.50 23484.24 22725.93

Operating 3299.15 4479.51 6690.56 8154.18 7045.11

Expenses

Total Expenses 9870.04 14076.96 23049.06 31638.42 29771.04

Operating Profit 2956 4690.67 5874.40 7960.69 8925.23

Other Provision 428.80 1594.07 2226.36 2904.59 3808.26

And Contigencies

Provision For Tax 522 556.53 537.82 898.37 1358.84

Net Profit 2005.20 2540.07 3110.22 4157.73 3758.13

Extraordinary 0.00 0.00 0.00 0.00 (0.58)

Items

Profit B/F 53.09 188.22 293.44 998.27 2436.32

Total 2058.29 2728.29 3403.66 5156.00 6193.87

Preference 0.00 0.00 0.00 0.00 0.00

Dividend

Equity Dividend 632.96 759.33 901.17 1227.70 1224.58

Corporate Dividend 90.10 106.50 153.10 149.67 151.21

Tax

Pershare Data

Eps(Rs.) 27.22 28.55 34.59 37.37 33.78

Equity 85.00 85.00 100.00 110.00 110.00

Dividend(%)

Book Value(Rs) 170.35 249.55 270.37 417.64 445.17

Appropriations

Transfer To 547.00 248.69 1351.12 1342.31 2008.42

Statutory Reserve

Transfer To Other 600.01 1320.34 0.00 0.01 0.01

Reserve

Proposed 723.06 865.83 1054.27 1377.37 1375.79

Dividend/Transfer

To Govt

Balance C/F To 188.22 293.44 998.27 2436.32 2809.65

Balance Sheet

Total 2058.29 2728.30 3403.66 5156.01 6193.87